Syracuse's The Penn Traffic Co., seeking to shore up continued losses, is turning to the nation's second-largest food wholesaler to assume most of the responsibilities of supplying Penn Traffic's customers, which includes its own P&C Foods supermarket chain, the company announced tonight.

The move will end a dozen Penn Traffic corporate jobs and save the company up to $22 million annually, Penn Traffic executives said.

The Penn Traffic Co., announcing its quarterly and six-month earnings, reported C&S Wholesale Grocers Inc. out of Keene, N.H., would take over most of the supply side of Penn Traffic's business.

C&S, a partner with Penn Traffic since early 2007, will now handle purchasing and supplying to P&C stores and Penn Traffic customers the bulk of what goes into the core of most supermarkets: grocery, bakery, deli, seafood, dairy, frozen products and more.

These supply services to P&C Foods and other grocery customers have historically been handled by Penn Traffic managers and out of warehouses based in Central New York.

"We believe that this move will free up cash that would otherwise be tied up in inventory and trade receivables, improving our ability to reinvest in stores and enhancing the service and value the company delivers to all customers, '' said Gregory J. Young, president and chief executive officer of Penn Traffic.

Also late Wednesday, Penn Traffic reported it lost $3.4 million in the fiscal second quarter, compared to a loss of $4.9 million in the same quarter a year ago. Sales fell to $306.9 million compared to sales of $318 million in the second quarter a year ago.

In the first half of its current fiscal year, Penn Traffic has lost $15.8 million compared to a loss of $12.3 million in the same period a year ago.

Sales fell to $594 million from $616 million compared to the same year-ago period, when Penn Traffic had a handful more stores.

Penn Traffic, which employs more than 7,100 people, operates fewer than 100 supermarkets and supplies supermarket products to another 100 or so grocers.

The new arrangement with C&S, said Young, is designed to stabilize the company and will not affect jobs for warehouse workers or drivers., the company reported tonight.

Outbound logistics and distribution form Penn Traffic's warehouses in Geddes to its retail stores and wholesale customers will continue to be operated by Penn Traffic, the company said. Corporate warehouse jobs, drivers and other transportation jobs, category managers and other merchandising functions will not change, the company said.

But the management downsizing will occur.

"Some of the essential measures we've taken to stabilize the company, such as this new procurement agreement, have unfortunately required the decision to eliminate positions," said Young.